Hacker News Reader

Comment by ravingraven | Hacker News Reader

Because currencies are not stocks.

Edit: I understand that FX trade is not tax free. What I am saying is that we should tax crypto like we tax (or don't tax, depending on where you live) other currencies because that is what they are.

View on HN

Free advice: don't try your hand at FX trading until you've spoken to your accountant. Profits from FX trading aren't tax free.

depends on country.

Not in this context. We're talking about the IRS. An American agency.

In the UK Forex trading can be structured as a bet. This is called 'spread betting.' This gets around capital gains tax and income tax in the UK as long as it's not your main source of income.

This wouldn't work in the US because gambling winnings are taxed even more highly than other sources of income.

Yes, I quite agree... indeed many States in America have Anti-Gambling Laws. In comparison, I was quite surprised at how ingrained in the culture gambling is in England and how it permeates through all levels of society. To me this seemed like quite the juxtaposition when you compare how the English vs Americans view new venture risk.

First of all, bitcoin is more like gold than a currency.

Second, forex traders (and gold owners) have to pay capital gains taxes on any gains.

So, what is your point?

except that if someone pulls the plug they disappear while you can still make teeth out of gold :)

Indeed. Not just a shiny rock, that Au.

https://spectrum.ieee.org/biomedical/devices/smart-contact-l...

Not necessarily true... again it depends on the tax rules that apply to you. In the UK you can buy Gold Britannia coins and Sovereigns which is Capital Gains Tax (CGT) exempt because of a loophole where British Legal currency (which the gold coins are) is exempt from CGT.

We are talking about US federal taxes, nothing to do with Britain.

Well the commenter didn't say they were speaking from a US perspective and I wanted to emphasise that it's not the case for everyone. While HN definitely has a US slant, there are still a great deal of HN readers from around the world that I wouldn't want to be given the wrong impression.

They aren't supposed to be. But for now that's how they are being treated by the userbase. There is definitely a huge gap between the original intent of these cryptocurrencies and how 95% of people are using them.

Capital gains are capital gains. It doesn't matter how you made it.

also depends on your country. In some countries bitcoin are entirely illegal, some have no rules at all (that means grey area and also no taxation) and some consider it as capital gains which needs to be taxed.

It was never a gray area in the United States. Anything you can own is an asset and you owe taxes against it. This is true of things you buy as well. If you buy two rare Yu-Gi-Oh cards, and the value appreciates, and you sell them for a higher price, you owe tax on the profit. The same is true for bitcoin.

You also can't get around this by simply bartering your assets. Once the asset leaves your hand or control -- be it bitcoins or Yu-Gi-Oh cards -- you owe tax on the difference in the price you paid (valued in USD) and the price it was worth at barter time. It is your responsibility to fairly make this valuation.

This is not rocket science... the IRS website and the published tax codes explain this in great depth.

Reply on news.ycombinator.com